Borrowed Funds

12 Months Ended

Dec. 31, 2024

Borrowed Funds

Borrowed Funds

9. Borrowed Funds

The following is a summary of short-term borrowings at December 31, 2024 and 2023 with original maturities of less than one year:

(in thousands)	2024		2023
Securities sold under agreements to repurchase:
Outstanding at end of year	$	15,409	$	45,418
Weighted average interest rate at year end		0.24%		0.27%
Maximum amount outstanding as of any month end	$	44,415	$	59,777
Average amount outstanding	$	29,805	$	50,498
Approximate weighted average rate during the year		0.26%		0.24%
Overnight borrowings, weighted average interest rate of 4.50% at December 31, 2024	$	50,000	$	—

Repurchase agreements were secured by investment securities with a market value of $22.9 million at December 31, 2024 and $61.6 million at December 31, 2023.

The Bank has unsecured lines of credit totaling $140.0 million with correspondent financial institutions and  $86.6 million in a secured line with the Federal Reserve discount window to meet daily liquidity requirements.  At December 31, 2024, there were $50.0 million in outstanding secured borrowings with the Federal Reserve discount window.  At December 31, 2023, there were no borrowings under these credit facilities.  

The following is a summary of long-term borrowings at December 31, 2024 and 2023 with original maturities exceeding one year:

(in thousands)	2024		2023
FHLB advances bearing fixed interest rates ranging from 3.84% to 4.04% at December 31, 2024 and 4.53% to 4.69% at December 31, 2023	$	90,000	$	80,000
Junior subordinated debt, bearing variable interest rate of 7.36% at December 31, 2024 and 8.39% at December 31, 2023	$	30,929	$	30,929
Total long-term debt	$	120,929	$	110,929

In March 2004, Trust I and Trust II issued preferred securities with an aggregate liquidation amount of $30.0 million to third-party investors and issued common equity with an aggregate liquidation amount of $0.9 million to First United Corporation. These Trusts used the proceeds of these offerings to purchase an equal amount of junior subordinated debentures (“TPS Debentures”), as follows:

$20.6 million—floating rate payable quarterly based on three-month Secured Overnight Financing Rate (“SOFR”) plus 275 basis points (7.36% at December 31, 2024), maturing in 2034, became redeemable five years after issuance at First United Corporation’s option.

$10.3 million—floating rate payable quarterly based on three-month SOFR plus 275 basis points (7.36% at December 31, 2024) maturing in 2034, became redeemable five years after issuance at First United Corporation’s option.

The TPS Debentures issued to each of the Trusts represent the sole assets of that Trust, and payments of the TPS Debentures by First United Corporation are the only sources of cash flow for the Trust. First United Corporation has the right, without triggering a default, to defer interest on all of the TPS Debentures for up to 20 quarterly periods, in which case distributions on the preferred securities will also be deferred. Should this occur, the Corporation may not pay dividends or distributions on, or repurchase, redeem or acquire any shares of its capital stock.

The contractual maturities of the FHLB advances outstanding at December 31, 2024 are $25.0 million on September 19, 2025 and $65.0 million on March 20, 2026.  The contractual maturities of the junior subordinated debt outstanding at December 31, 2024 is 2034.

The Bank has a borrowing capacity agreement with the FHLB in an amount equal to 30% of the Bank’s assets. The available line of credit equaled $567.4  million at December 31, 2024 and $571.4 million at December 31, 2023. This

line of credit, which can be used for both short and long-term funding, can only be utilized to the extent of available collateral. The line is secured by certain qualified mortgage, commercial and home equity loans as follows (in thousands):

1-4 family mortgage loans	$	151,493
Commercial loans		124,571
Multi-family loans		12,619
Home equity loans		21,104
Total available borrowing capacity		309,787
Less: borrowings and letters of credit outstanding		(96,214)
Available credit	$	213,573